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Fitting Parametric Lorenz Curves to Grouped Income Distributions--A Critical Note

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  • Schader, Martin
  • Schmid, Friedrich

Abstract

The paper surveys various parametric Lorenz curves to be fitted to ground income data in order to obtain an estimate for the Gini measure of inequality. The curves are fitted to 16 sets of empirical income data. The results are compared to the results of the purely nonparametric method (due to Gastwirth) of computing lower and upper bounds for the Gini measure. It is shown that most of the parametric curves are unreliable in that they may produce estimates outside the bounds.

Suggested Citation

  • Schader, Martin & Schmid, Friedrich, 1994. "Fitting Parametric Lorenz Curves to Grouped Income Distributions--A Critical Note," Empirical Economics, Springer, vol. 19(3), pages 361-370.
    • Handle: RePEc:spr:empeco:v:19:y:1994:i:3:p:361-70
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    Cited by:

    1. Sami Bibi & AbdelRahmen El Lahga, 2010. "Generating Reliable Data to Perform Distributional Analysis in the Arab Region," Working Papers 561, Economic Research Forum, revised 10 Jan 2010.
    2. Ogwang, Tomson & Rao, U. L. Gouranga, 2000. "Hybrid models of the Lorenz curve," Economics Letters, Elsevier, vol. 69(1), pages 39-44, October.
    3. Florent Bresson, 2010. "A general class of inequality elasticities of poverty," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(1), pages 71-100, March.
    4. Tom Van Ourti & Philip Clarke, 2008. "The Bias of the Gini Coefficient due to Grouping," Tinbergen Institute Discussion Papers 08-095/3, Tinbergen Institute.
    5. José‐María Sarabia & Enrique Castillo & Daniel J. Slottje, 2001. "An Exponential Family of Lorenz Curves," Southern Economic Journal, John Wiley & Sons, vol. 67(3), pages 748-756, January.
    6. WANG, Zuxiang & SMYTH, Russell & NG, Yew-Kwang, 2009. "A new ordered family of Lorenz curves with an application to measuring income inequality and poverty in rural China," China Economic Review, Elsevier, vol. 20(2), pages 218-235, June.
    7. ZuXiang Wang & Yew-Kwang Ng & Russell Smyth, 2007. "Revisiting The Ordered Family Of Lorenz Curves," Monash Economics Working Papers 19-07, Monash University, Department of Economics.
    8. Le–Le Zou, 2012. "The impacting factors of vulnerability to natural hazards in China: an analysis based on structural equation model," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 62(1), pages 57-70, May.
    9. Philip Clarke & Tom Van Ourti, 2009. "Correcting the Bias in the Concentration Index when Income is Grouped," CEPR Discussion Papers 599, Centre for Economic Policy Research, Research School of Economics, Australian National University.

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